Small to mid-market (SMB) executives should focus on strategies and personnel.

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$25 TO $50 MILLION COMPANY CHALLENGES

Small to midsize (SMB) companies in this stage are out of the danger zone. They’ve survived and claimed their space in the market. Over 98% of all US companies never make it here.

Now it’s time to focus on building a company that will be viable long-term. It’s time to scale, and that means bringing in professional management executives. While simple in concept, this is often the most challenging time for CEO founders and the original leadership team.

Why? Often existing management is not suited for evolving leadership roles the company now needs. This stage is all about people – bringing in properly trained personnel, and moving or removing those who are no longer effective in roles they once owned.

Dealing with people is always more difficult than it should be. Humans are imperfect, emotional beings, and the people who brought the company to this stage often resist changes required for continued growth.

For success in this stage, CEOs must refocus leadership from leading the charge in the market to leading their people through this transitional stage. The market has accepted the offering, but the people handling the day-to-day operations may not accept the new changes required at this stage.

If the CEO cannot lead them through these challenges, the company might regress to the previous stage.

Profile of a $25 to $50 Million SMB

Characteristics Struggles
  • First attempts to bring in outside professional management
  • Development of corporate identity through professional marketing
  • Enhanced HR direction – HR director may be brought on board
  • Regional growth strategy now in place
  • Competing with national competitors for business within market
  • Organizing a board of directors and interfacing with leadership
  • Revising the role of the founder
  • Issues incurred by first serious attempts to bring in outside professional management
  • Hiring
  • Employee retention
  • Compensation and ownership incentives for key executives
  • Growth outside the region
  • Multiple location management
  • Technology changes
  • Training for staff and managers
  • Long-term strategy
  • Sales management
  • Sales growth
  • Pricing pressure
  • Standing apart from competitors
  • First attempts/offers to sell or buy the organization

Executive Development to Build Value in SMBs

  • Understand competitive positioning
  • Create clear career paths for personnel
  • Obtain experienced financial guidance to support growth
  • Add a professional CEO to the board of directors
  • Develop an acquisition strategy
  • Create a continual on-boarding/HR training program
  • Define brand strategy and align with marketing activities
See the keys to building value in $50 to $100 million companies